MANILA -- San Miguel, the owner of the Philippines' largest brewer, plans to bid for Vietnam's No. 1 beer maker, an official said on Monday.
Confirming a local report, San Miguel Chief Financial Officer Ferdinand Constantino told the Philippine Stock Exchange that the company "shall participate in the public bidding that will be conducted by the Vietnamese government for the sale of 89.59% of Saigon Alcohol Beer and Beverage Corporation," also known as Sabeco.
The Vietnamese government plans to divest its stake in Sabeco in two phases, beginning with the initial sale of a 53.59% stake this year, according to reports.
San Miguel Brewery controls over 90% of the Philippine beer market, which, according to Euromonitor International, is expected to grow annually by 1.5% until 2020.
Vietnam's beer market is expected to grow faster, but competition is expected to become more fierce as foreign companies such as Heineken come in.
San Miguel Brewery, for its part, has a manufacturing facility in Vietnam and is familiar with the market. Should it submit a bid, it may compete with global brewers like Heineken and Anheuser-Busch InBev as well as regional giants like Thai Beverage, Asahi and Kirin Holdings, which owns half of San Miguel Brewery.
San Miguel Brewery will likely bid alone, according to local media reports which cited an interview with Ramon Ang, president of San Miguel Corporation, a diversified conglomerate with interests in areas such as food, beverage, and infrastructure.
Sabeco, which controls a little less than half of Vietnam's beer sector, has 54 subsidiaries and joint ventures. It has 23 breweries nationwide with a total annual production capacity of 1.8 billion liters. Their utilization rate last year was 82%. The company owns 11 trading companies that distribute Sabeco products across the country.
San Miguel Brewery's net income rose 31% to 17.7 billion pesos last year, as revenues reached a record of 97.2 billion pesos, up by 18% year-on-year, thanks to "strong marketing campaigns and favorable economic conditions."